FCC OKs ‘Hardship’ Waivers for RCN, Three Others

The action on CableCARD set-tops isn’t over: The Federal Communications Commission’s Media Bureau July 23 issued a second wave of rulings on the integrated set-top ban, which went into effect July 1.

The agency granted a one-year waiver of the integration ban to four cable operators -- RCN, WideOpenWest, James Cable and Great Plains Cable Television -- for certain models of set-top boxes, citing financial difficulties of each company.

“In light of petitioners’ demonstrated financial hardships … we conclude that a limited, one-year grant of their waiver requests is justified” under FCC rules, the Media Bureau said.

The decision mirrored the FCC’s rationale for granting an exemption to Charter Communications until July 1, 2008, for seven models of low-cost set-tops.

The FCC’s integrated set-top ban, which had been deferred twice, is intended to make third-party consumer electronics -- like TiVo’s digital-video recorders -- work better in cable networks by forcing operators to use the same CableCARD standard for handling security functions.

In a prepared statement, RCN said, “The commission recognizes that RCN's capital structure and resources are vastly different from the incumbent cable and telephone companies with whom we compete, and that without this waiver, the increased cost of basic set-top boxes to a company of RCN's size and limited capital resources would have crippled our ability to continue this important effort.”

RCN added that it “continues to hope that technological hurdles will be overcome so that consumers will have a choice of inexpensive set-top boxes that will be compatible with our network.”

For the first quarter of 2007, RCN reported $153 million in revenues and a $22 million net loss from continuing operations. The cable overbuilder had $202 million in long-term debt as of March 31.

Also Monday, the FCC granted waiver requests to seven phone companies because they already operate all-digital systems or have promised to do so by Feb. 17, 2009, when TV broadcasters are required to stop transmitting analog signals.

That’s the same reason the agency gave late last month in approving waivers for Verizon Communications, Qwest Communications International and about 120 other providers. The phone companies that received waivers Monday were: Colo Telephone, Griswold Cooperative Telephone, Coon Creek Telecommunications, Wellman Cooperative Telephone Association, Interstate Cablevision, NTS Communications and XIT Telecommunication & Technology.

In addition, the Media Bureau:

• Denied a request by Innovative Cable TV, a cable operator in the U.S. Virgin Islands with 26,000 subscribers, which had pledged to eliminate analog service by Dec. 31, 2009. The bureau said the company’s commitment to go all-digital 10 months after the Feb. 17 digital-TV cutoff “fails to outweigh the significant harm that would result from undermining the integration ban and impeding the development of a competitive market for navigation devices.”

• Denied ComSouth’s May 18 request for a two-year waiver, saying that the small Hawkinsville, Ga.-based phone and cable company didn’t document that it has made “substantial efforts to comply with the integration ban.” The agency added that ComSouth’s claim that it will have difficulty competing with direct-broadcast satellite operators because of the set-top ban was “too speculative.”

• Deferred enforcement of the ban until Sept. 1, 2007, for JetBroadband and requested additional information about the operator’s proposal to use the downloadable-security system developed by Beyond Broadband Technology.